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The rout in stock markets continued on Friday, as worries about an escalating global trade war overshadowed a positive reading about the health of the U.S. labor market.
China struck back at President Trump, imposing steep tariffs on all U.S. products, matching the levies that Mr. Trump announced this week on Chinese goods. Later, after a report showing a solid pace of hiring at American employers, the president said China’s retaliation was misguided and that his trade policy was effective in bolstering the U.S. economy.
Here’s what else to know:
China retaliates: Beijing’s Finance Ministry said it would impose 34 percent tariffs on all U.S. products, matching the levies that Mr. Trump announced this week on Chinese goods. The Commerce Ministry also said it was barring 11 American companies from doing business in China, and customs authorities said that they would halt chicken imports from five of America’s biggest agricultural exporters.
Global markets tumble: The S&P 500 tumbled in early trading, losing well over 2 percent, extending losses from the day before. The tech-heavy Nasdaq fell about 3 percent and slipped into a bear market, Wall Street’s term for a decline of at least 20 percent from its latest peak. Markets in Asia and Europe also dropped sharply.
U.S. jobs data: Employers added 228,000 jobs last month, the Labor Department reported, a figure that was far more than expected and was up from a revised total of 117,000 in February. Diane Swonk, chief economist at the accounting firm KPMG, said she was “pleasantly surprised” by the data, but added that the impending repercussions of the Trump administration’s federal job cuts and tariffs mean “this is likely to be the high-water mark.”
Trump reacts: Although the jobs data covered a period before Mr. Trump’s sweeping worldwide tariffs went into effect, the president exulted in the figures, declaring in a post on Truth Social: “GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING.” He also lashed out at Beijing’s countermeasures, saying China had “PLAYED IT WRONG” and “PANICKED.”
Just minutes before the Fed chair is due to give a speech about the economic outlook, Trump called for the central bank to lower rates and attacked him for being “always ‘late,’” in a post on Truth Social:
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months - A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”
General Motors confirmed on Friday that it plans to increase pickup truck production at a plant in Fort Wayne, Ind., in response to the U.S. tariffs on imported cars. The plant makes the Chevrolet Silverado and GMC Sierra full-size pickups, two of G.M.’s most profitable models. Increasing production in Fort Wayne will allow G.M. to import fewer trucks from factories in Canada and Mexico. “General Motors will be making operational adjustments at Wayne Assembly, including hiring, temporary employees, to support manufacturing and business needs,” the company said.
Bank stocks are in a free fall, with Bank of America and Goldman Sachs each down 8 percent Friday after similar drops on Thursday. The reason is simple, said analysts at Barclays: “While banks might not be directly impacted by tariffs, they are exposed to every industry that is.”
Nintendo said on Friday that it would not open preorders on its new video game console, the Switch 2, on April 9 as previously planned “in order to assess the potential impact of tariffs and evolving market conditions.” This week, the Japanese company announced that the Switch 2 would cost $450 and be released on June 5.
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As financial markets recoiled for a second day and China said that it would hit the United States with its own punishing tariffs, President Trump on Friday sounded a defiant note about his approach, promising that “MY POLICIES WILL NEVER CHANGE.”
Instead, Mr. Trump maintained in a series of posts on Truth Social that his economic strategy is working, as he held up a better-than-expected new jobs report — reflecting hiring before he announced his latest round of tariffs — as a sign the economy remains strong.
Global markets told a different story, as major U.S. indexes slipped into the red hours after China announced new retaliatory tariffs on the United States, signaling a wider trade war. The S&P 500 fell about 2.5 percent, on the heels of its worst day since 2020.
China’s new 34 percent tariffs on American goods are set to take effect next week, matching Mr. Trump’s decision to hit Chinese imports with a 34 percent tariff. The president plans to start imposing an across-the-board 10 percent duty on all of the country’s trading partners on Saturday, followed by additional levies later in the week on China and other nations that he has accused of engaging in unfair trade practices.
The expansive tariffs have set off a global frenzy, as other governments try to figure out how, or if, to retaliate, while trying to persuade Washington to relax its coming taxes on imports. The Trump administration has sent mixed signals over its willingness to negotiate: Some of Mr. Trump’s advisers have said they do not intend to haggle, but the president himself told reporters Thursday that he could make a deal if the United States received something “phenomenal.”
In the midst of the uncertainty, Mr. Trump took to Truth Social, where he circulated another user’s video that argued “Trump is purposely CRASHING the market,” in a bid to force the Federal Reserve to lower interest rates.
He followed up by doubling down on his tariffs, heralding that the United States had already attracted new foreign investment: “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”
Turning his attention to China, the president said the country had “PLAYED IT WRONG” by retaliating against the United States. The president and his aides previously have signaled they could ratchet up their tariff rates if other nations reacted similarly.
And Mr. Trump celebrated newly released data on Friday that showed employers added 228,000 jobs last month, more than analysts had anticipated. The president said it showed his strategy was “ALREADY WORKING,” even though the report reflected hiring in the month before the White House announced its new, expansive tariffs.
“HANG TOUGH, WE CAN’T LOSE!!!” he wrote.
The tech-heavy Nasdaq Composite index has dropped into a bear market, Wall Street’s term for a decline of at least 20 percent from its latest peak. The index is about 3 percent lower for the day, after falling 6 percent yesterday, its worst day since 2020.
That means both the Nasdaq and the Russell 2000 index of smaller companies are both in a bear market now. The S&P 500 is roughly 15 percent below its February peak.
One of the organizations that the Chinese government sanctioned today in response to U.S. tariffs is a trade group called the Coalition for a Prosperous America. The group has been a big proponent of Trump’s tariffs and has put out studies in support of their positive economic effects.
If the S&P 500 holds at its current level, or sells off further, it would make this week worse than anything the index suffered under the last administration.
Major U.S. stock indexes opened sharply lower today. The S&P 500 is down roughly 2.5 percent, extending declines from yesterday, its worst day since 2020. A stronger-than-expected jobs report this morning – typically welcome news for investors – is being overshadowed by concern about the path forward for the U.S. economy, as Trump’s trade policies intensify fears about an economic slowdown.
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With a better-than-expected jobs report in hand, President Trump on Friday morning turned his attention back to China, which announced earlier it would retaliate against soon-arriving new U.S. tariffs. On Truth Social, the president wrote: “CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!”
Eric Winograd, an economist at AllianceBernstein, sums up the muted reaction to today’s strong jobs report: Today’s data is “far less significant than the full-fledged trade war the U.S. has embarked upon,” he says. “The trade war impacts the forward outlook while the jobs data describes the status quo ex ante. That matters, but not as much as what comes next, and trade policy will be the primary driver of that.”
One set of industries I also watch closely is the care professions, since they also tend to allow people with dependent parents and children go to work themselves. Child care services seem to have plateaued after a postpandemic bounce. While home health services have returned to their trend, jobs at skilled nursing facilities remain significantly depressed.
I’m getting lots of emails and messages from readers asking whether we should trust these numbers. That’s an understandable question given comments from Howard Lutnick, the commerce secretary, suggesting he might seek to change the way the government calculates some statistics, and the administration’s decision to kill off expert committees that advised the statistical agencies, among other moves. But so far, there is no evidence that the administration has done anything to interfere with the data itself, and sources inside the statistical agencies say they are doing their work normally. In other words, yes, I trust these numbers, at least for now.
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One thing I’ve been watching is employment among the foreign-born, as President Trump cracks down on immigration. Those effects don’t seem to be driving down the overall number of people employed, which has been growing swiftly and continued last month. Labor force participation among the foreign-born has been growing faster than the rate among people born in the United States, a population that is aging more quickly.
Of the 228,000 or so job gains this month, 209,000 of them were on private payrolls.
A chart showing the monthly change in jobs which added 228,000 in March.
Monthly change in jobs
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Omair Sharif, founder of Inflation Insights, captures the mood of this report well. The headline on his note this morning is: “Someone forgot there was a recession coming.”
Sharif adds, however, that slowing wage gains will make it harder for workers to weather higher prices due to tariffs.
In the stock market, today’s jobs numbers came on “a day when good news doesn’t matter,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. Investors are squarely focused on the potential for trade wars to slow economic growth and increase the risk of a recession, he said.
Reacting specifically to today’s “GREAT” jobs report, President Trump followed up in another post on Truth Social that his strategy is “ALREADY WORKING,” adding: “HANK [sic] TOUGH, WE CAN’T LOSE!!!” (Remember, the jobs figures today reflect hiring in March, before Mr. Trump put in place his sweeping new global tariffs this week.)
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The biggest driver of growth, as usual, was health care and social assistance, adding 78,000 jobs. The sectors have accounted for about 45.6 percent of all jobs added over the past year.
It’s worth noting that the headline payrolls number was flattered a bit by about 15,000 workers returning from strikes, as well as mild weather after winter freezes and storms. (Only 102,000 people weren’t at work due to bad weather, compared with 520,000 on average for the previous two months.)
Manufacturing employment barely rose in March, up just 1,000 jobs, and is down slightly so far this year. And employment in auto manufacturing edged down in March. Factory jobs, especially in the car industry, have been a major focus for the Trump administration.
Education and health
+77,000 jobs
Leisure and hospitality
+43,000
Retail
+23,700
Government
+19,000
Construction
+13,000
Business services
+3,000
Manufacturing
+1,000
Futures on the S&P 500, though they’ve pared back some losses from earlier this morning, are still down more than 2.5 percent. Stocks are not rallying on the strong jobs numbers, reflecting concern among investors about what’s in store for the U.S. economy. The jobs data “is backward looking and doesn’t say anything about how employers might fare over the coming months,” Glen Smith, chief investment officer at GDS Wealth Management, said, citing tariffs and federal job cuts.
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The slight increase in labor force participation came entirely from younger and older people. The participation rate for people in their prime working years, ages 25 to 54, drooped to 83.3 percent. That’s now down from a recent high of 83.9 percent last year, which approached the records of the late 1990s.
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President Trump’s tariffs mean that companies across the European Union and around the world are at risk of losing access to the world’s largest consumer market.
Naturally, they are looking for the next big thing. Statistically speaking, that would mean China.
The E.U. has the second-largest consumer market in the world behind America; China is third. But China and the E.U. have not exactly been cozy in recent years. Europe has regularly blasted China for overproducing and dumping artificially cheap products on the global market, and European leaders have criticized China’s stance toward Russia’s war in Ukraine, among other political and social issues.
Still, the E.U. is staring down 20 percent across-the-board tariffs in the United States, and even higher levies on major products like cars and trucks. China is confronting rates in excess of 50 percent. There’s a small chance that those tariffs could drive the two large economies closer together, experts said — an unintended consequence at a time when Mr. Trump’s America has been trying to weaken China.
There have been early hints of a thaw. The E.U. imposed higher tariffs on Chinese-made electrical vehicles last year, but China’s commerce ministry said at a news conference on Thursday that the two sides had agreed to restart negotiations. Olof Gill, an E.U. spokesman for trade, said officials had agreed to “continue discussions” on electric vehicle supply chains and take a “fresh look” at pricing.
But there is an even greater possibility that this moment will tear the E.U. and China further apart. China’s reduced access to American consumers could prod its companies to send even more cheap metals, chemicals and other products in Europe’s direction, worsening concerns about dumping and heightening already-high tensions on other matters. Relations between the two nations could deteriorate, widening the damage as America blows up longstanding global trade patterns.
“There’s two ways that this could play,” said Theresa Fallon, an analyst at the Center for Russia, Europe, Asia Studies in Brussels. “Europe is in a really tough position.”
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Europe is responding quickly to Mr. Trump’s trade war. It plans to finalize next week initial lists of goods destined for retaliatory tariffs, and officials have promised more will come. It is also trying to negotiate to get rid of the tariffs, with the E.U. trade commissioner set to meet his U.S. counterparts through teleconference on Friday.
If the U.S. tariffs are not quickly negotiated away, Europe — and China — could find themselves looking for new consumers.
Another big part of Europe’s strategy? Making new friends.
Since late last year, the bloc has worked to expand relations with India, South American countries, South Africa, South Korea and Mexico. It has also drawn nearer to Canada and the United Kingdom, especially on defense issues.
Yet the U.S. is difficult to replace with one-off trade deals elsewhere because of the sheer size of its consumer market: $18.8 trillion in 2024, according to World Bank data. The E.U. trails at about $10 trillion, China at about $7 trillion. America is the E.U.’s most important export market.
Filling a U.S.-shaped void with China, while mathematically obvious, would be tricky. China and the E.U. have been moving further apart in recent years, with declining trade flows, and regular accusations by the E.U. that China is using trade practices that distort the market.
Europe’s dilemma when it comes to China has been on full display in the way that European leaders have talked about the Asian nation in recent months.
“We must engage constructively with China,” Ursula von der Leyen, who heads the E.U.’s executive arm, said during a speech in Davos, Switzerland, in January. She talked about expanding trade and investment ties “where possible.”
But when Mr. Trump’s tariff announcements came out this week, a flood of cheap goods coming from Asia was an immediate concern.
“We will also be watching closely what indirect effects these tariffs could have, because we cannot absorb global overcapacity, nor will we accept dumping on our market,” Ms. von der Leyen warned in her televised response on Thursday to the Trump tariffs.
The E.U. and China are to have a summit this year, though details on timing and location have yet to be determined.
Noah Barkin, a Berlin-based visiting senior fellow at the German Marshall Fund and a specialist on China, said: “Trump’s tariffs are likely to divert a massive amount of Chinese exports into the E.U.”
“The bloc is likely to throw its entire trade policy toolbox at Beijing in response,” he added. “It is difficult to envision a scenario where this ends well for the E.U.-China relationship.”
U.S. employers accelerated hiring in March, even as some data suggest underlying weaknesses in the labor market, and with the impact of the Trump administration’s economic policies only starting to play out.
Employers added 228,000 jobs last month, the Labor Department reported on Friday, a figure that was far more than expected and was up from a revised total of 117,000 in February. The unemployment rate rose to 4.2 percent, from 4.1 percent.
The data, based on surveys of households and businesses conducted in the second week of March, came as a surprise, as many analysts have predicted a cooling in economic growth this year, even before President Trump took office.
Health care leads the way: Health care and social assistance led the increase in jobs, with a gain of 78,000. Retail, transportation and warehousing also reported gains in jobs.
Federal jobs decline: The federal work force declined by 4,000 in March, a slowdown from a revised drop of 11,000 in February. While the Trump administration had fired some 25,000 probationary employees, some of them have since been reinstated, at least temporarily.
Markets open lower: The jobs numbers did little to alter the glum investor mood after Thursday’s huge sell-off, the biggest since the height of the pandemic, over the rollout of Mr. Trump’s worldwide tariff campaign. The S&P 500 opened 2.5 percent lower.
Trump reacts: In a post on Truth Social, Mr. Trump declared: “GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING.”
Eyes on the Federal Reserve: The strong report helps to bolster the Federal Reserve’s decision at recent meetings to hold off on interest rate cuts because the economy is in a “good place.” Officials have repeatedly said that the central bank can afford to wait for more clarity about the impact of the Trump administration’s economic policies.
What the analysts are saying: Diane Swonk, chief economist at the accounting firm KPMG, said she was “pleasantly surprised” by the data, but added that the impending repercussions of federal job cuts and tariffs will mean “this is likely to be the high-water mark.”
